Key Takeaways; Cannabis Sector

• Chicago Atlantic REIT secured a $50 million loan to fund new marijuana investments
• Canopy Growth reduced loan term by $100 million to strengthen financial position
• RIV Capital reported doubling revenue, and strong synergy gains ahead of Cansortium merger

Key Takeaways; Psychedelic Sector

• Awakn expanded phase 3 trial sites for alcohol use disorder
• MIRA Pharmaceuticals announced breakthrough with ketamine-based pain treatment

Below is a weekly roundup of what happened this week in the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: Chicago Atlantic

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI), a cannabis-focused lender and commercial mortgage real estate investment trust, recently secured a $50 million unsecured term loan with a fixed 9% interest rate, maturing in October 2028. This loan, which included a 1.50% upfront fee, allows for prepayment with penalties of 3% in the first year and 2% in the second year. According to the company, the funds will be used to repay existing borrowings on its $110 million revolving credit facility and for general working capital.

This loan marked a significant step in Chicago Atlantic’s ongoing efforts to expand its investments in the cannabis sector. The company has been actively deploying capital, such as a recent $20 million loan to Massachusetts-based Nova Farms and funding for dispensary buildouts in New York’s social equity program. 

The firm’s CEO, Peter Sack, highlighted the loan as an example of the company’s ability to source accretive financing that enhances liquidity for pursuing additional opportunities. “This unsecured note is the latest example of our ability to source accretive financing that further enhances our operational liquidity to pursue additional opportunities within our active originations pipeline,” Sack said in a statement.

In conjunction with this loan, Chicago Atlantic received its first credit rating from Egan-Jones, which assigned a BBB+ rating to both the company and the loan, indicating a solid ability to repay despite potential sensitivity to evolving credit conditions.

Since its inception, Chicago Atlantic has deployed over $2.2 billion in credit and equity investments, demonstrating its commitment to supporting the growth and development of the cannabis industry.

#2: Canopy Growth

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC), a leading Canadian cannabis operator, made a strategic move to improve its financial standing by reducing a loan term by $100 million (approximately CAD 138.5 million). This prepayment allowed the company to decrease its debt at a discounted rate of $97.5 million, resulting in annual interest savings of around $14 million.

The company’s Chief Financial Officer, Judy Hong, emphasized that this early repayment demonstrates Canopy Growth’s commitment to minimizing cash burn and enhancing its capital structure. “Our proactive steps to reduce debt and extend maturity enhance our balance sheet flexibility to invest in growth areas and drive long-term value creation for our shareholders,” Hong said in a statement.

As part of the loan amendment, the maturity date was extended to December 18, 2026, with an option for an additional prepayment of $100 million at the same discounted price by March 31, 2025. If executed, this would further extend the loan’s maturity to September 19, 2027.

Canopy has been strategically working to strengthen its position in the cannabis market. In June, the company announced plans to acquire Acreage Holdings, Inc. (OTC:ACRHF) (OTC:ACRDF), a multistate marijuana operator, with the deal expected to close in the first half of 2025. This acquisition is a key part of Canopy’s strategy to expand its footprint in the U.S. cannabis sector. Shortly after this announcement, Canopy revealed plans to raise up to $250 million through an at-the-market equity program, issuing new common shares in public offerings across both the U.S. and Canada, potentially to facilitate this acquisition.

#3: RIV Capital

RIV Capital Inc. (CSE: RIV) (OTC: CNPOF) recently announced an operational update highlighting the Company’s recent achievements. The company reported substantial revenue growth and strategic achievements as it prepares for its upcoming merger with Cansortium Inc. (CSE: TIUM.U) (OTC: CNTMF), which is also known as Fluent. The business combination is set to close in Q4 2024. 

RIV Capital, which operates under its Etain brand, has capitalized on New York’s cannabis market by offering both medical and adult-use products in its three co-located stores, with the latest store opening in Manhattan this October. 

During the operational update highlight, the company disclosed that its net revenue for 2024 (as of October 23) had doubled compared to the same period in 2023. In 2023, the company’s revenue from medical-only sales was $3.7 million over six months and $5.8 million over nine months ending in December. According to the company, its introduction of adult-use sales in February 2024 drove the significant revenue increase. In addition to its retail expansion, RIV Capital stated that it had broadened its wholesale business, serving over 50 customers, and has seen increased demand for premium bulk flower sales to prominent New York brands. 

Dave Vautrin, Chief Retail Officer and Interim CEO, highlighted Q3 2024 as a pivotal quarter marked by record-setting revenue and a growing wholesale business. He emphasized that these achievements set the stage for a strong finish in 2024 and smooth integration with Cansortium after the business combin ation closes. The companies recently launched a joint product line called “Moods,” which they have begun wholesaling in the state.

RIV Capital’s momentum is expected to persist, driven by its optimized retail operations and increasing wholesale activities, positioning the company for future growth in New York’s expanding cannabis market.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (CSE: AWKN) (OTC: AWKNF), recently announced the opening of four additional clinical trial sites in the UK as part of its groundbreaking ‘MORE-KARE’ Phase 3 trial for AWKN-001, a novel treatment for severe alcohol use disorder (AUD). The newly added sites include University Hospitals Sussex NHS Foundation Trust, South London and Maudsley NHS Foundation Trust, Greater Manchester Mental Health NHS Foundation Trust, and University Hospitals Plymouth NHS Trust, increasing the total to seven active sites.

AWKN-001 combines an N-methyl-D-aspartate receptor-modulating drug (ketamine) administered intravenously with manualized psycho-social support to create a comprehensive treatment for severe AUD. This trial is co-funded by the UK’s Medical Research Council (MRC), the National Institute for Health and Care Research (NIHR), and Awakn Life Sciences, managed by the Exeter Clinical Trials Unit at the University of Exeter.

Commenting on this expansion, Awakn CEO Anthony Tennyson remarked, “The expansion of trial sites marks a significant milestone in our mission to address the pressing need for innovative treatments for AUD. We are confident that AWKN-001 has the potential to change the standard of care for individuals suffering from severe alcohol use disorder in the UK, offering them a novel, more effective treatment pathway.”

Furthermore, Awakn’s Chief Research Officer, Prof. David Nutt, added, “The opening of these additional sites accelerates our ability to gather robust clinical data, essential for bringing this groundbreaking treatment to more patients. With the support of the UK’s leading research institutions, we are well-positioned to demonstrate the effectiveness of AWKN-001.”

The MORE-KARE study represents the largest investigation into ketamine-assisted therapy for AUD, with an estimated total trial cost of £2.4 million (CAD 4.2 million). As part of the deal, Awakn is contributing £0.8 million (CAD 1.4 million) to this vital research effort across eight NHS sites.

#2: MIRA Pharmaceuticals

MIRA Pharmaceuticals, Inc. (NASDAQ: MIRA) announced promising results for its experimental ketamine-based drug, Ketamir-2, which according to the company, “outperformed” existing pain treatments in preclinical studies. The Miami-based firm reported that Ketamir-2 showed up to 112% greater effectiveness compared to pregabalin (Lyrica) and 70% more relief than gabapentin (Neurontin) at higher doses. This follows earlier findings where the drug achieved complete reversal of neuropathic pain in animal models.

MIRA CEO, Erez Aminov, commented on this deal saying, “Ketamir-2, a non-opioid, offers tremendous promise for patients seeking better solutions for neuropathic pain without the habit-forming risks or debilitating side effects associated with existing medications.” MIRA’s research suggests that Ketamir-2’s unique properties allow for better absorption in the brain, potentially making it a safer and more effective treatment compared to traditional ketamine.

The drug’s development is timely, as MIRA faces financial challenges, reporting $1.9 million in operating costs in the first half of 2024, leaving $2.8 million in cash reserves. To fund its efforts, MIRA initiated an offering to sell up to $19.3 million in common stock. The company is targeting a rapidly growing neuropathic pain market projected to reach $5.2 billion by 2030, with gabapentin alone expected to generate nearly $5 billion by 2033.

MIRA also plans to submit an Investigational New Drug application to the FDA by December, with human trials set to commence in early 2025. In addition to pain management, MIRA is exploring Ketamir-2 for potential applications in treating post-traumatic stress disorder (PTSD) and other neuropsychiatric conditions.